Most of us think of the cost of transportation as the monthly payment on our car, perhaps with gasoline prices factored in. But when you add insurance, maintenance, registration fees, taxes and depreciation (that is, having to buy a new car when your current one collapses into repair hell), you may actually be spending thousands of dollars a year on personal mobility.
Is there any way to bring down these costs? A recent financial blog post suggests that you can save in a number of ways by buying a used car instead of a new one. The savings start with the sticker price. Edmunds, the car pricing service, estimates that the average total cost of a new compact SUV is $33,682, while the average total cost of a 3-4-year-old used compact SUV is $24,966. That difference of $8,716 should be added to the likelihood that you’ll be paying less for insurance coverage and lower vehicle taxation. Choosing a used car that is easy on gas, like a hybrid, and a car that the Consumer Reports website deems to be reliably free of defects and costly repairs, can lower your transportation costs still further.
It is worth it to even question whether some families need to be two-car families. Much of the time, only one person is traveling. If the other needs to run an errand like going to the grocery store while the car is out of the garage, that person could simply use the services of Lyft, Uber or a local Taxi service (if available in their area)—and pay a few dollars per trip, instead of thousands to have a car waiting in the garage for their convenience.
This article was written by an independent writer for Brewster Financial Planning LLC and is not intended as indiviidualized legal or investment advice.